KIP-5: Align APY
Summary
We propose adjusting the reward rate to align the APY to the approved APY framework in KIP-3. This adjustment is necessary to correct for Polygon’s faster block times (leading to a 7.2 hr rebase instead of 8). In order to maintain the approved 22,000% target APY in KIP-3, the reward rate would be adjusted from 0.46 to 0.417%.
Motivation
See below for an explainer for the motivation and rationale behind KIP-5: https://klima-dao.notion.site/KIP-5-Explainer-959aab27dcf14e9ba9c01540fa70a1a7
See below for the community forum discussion regarding KIP-5: https://forum.klimadao.finance/d/4-kip-5-rebase-timing-and-apy-alignment
Proposal
Factoring in a rebase period of 7.25 hours per rebase, a resulting 1,200 epochs per year (rounded down to be conservative) can be utilized for the APY formula.
To achieve our target APY of approx 22,000%, the reward rate should be set to 0.417% (assuming 92.5% of KLIMA is staked). This change would be made over an additional 25 epochs (8 days) after the conclusion of the change approved in KIP-3.
The Policy team will continue to monitor the block and rebase times to ensure the reward APYs are consistent with community approved APY targets, and propose additional adjustments if necessary.
| Voter | Cast Power | Vote & Rationale |
|---|---|---|
 0x5E6f...47E433 | 2,267 | For: Reduce rate to match actual |
 0x730C...9D2317 | 1,825 | For: Reduce rate to match actual |
 0x1b1B...00F65F | 1,779 | For: Reduce rate to match actual |
 0x5803...A57329 | 1,724 | For: Reduce rate to match actual |
 0x1560...aBd89D | 1,714 | For: Reduce rate to match actual |
VOTE POWER
Proposal Status
- Wed December 01 2021, 08:00 pmVoting Period Starts
- Mon December 06 2021, 08:00 pmEnd Voting Period
Current Results
1-For: Reduce rate to match actual
50,558.694
2-Against: Do not reduce rate
2,128.297